Scarcity Thinking: The Mindset that Robs You of Your Profits and Your Potential as a Trader

Everyone knows what the fear of missing out is. Everyone knows what the fear of losing is. Everyone knows what it's like not to be able to pull the trigger due to fear. Oh, my God, what may happen, the apprehension of the future. And yet most traders stay stuck at saying, oh, if I could get rid of that fear like it's some object, then everything would be fine. But what they don't do, they don't look deeper and say, you know something? This is not just about fear as a single unit of something where the brain is perceiving a biological threat or psychological discomfort out there. No, it's really about scarcity thinking. It's a way of looking at the world, of being in the world and of thinking about the world.

Where does this come from? Where does scarcity thinking really come from? Well, the truth is it comes out of our evolution, for one. It's biological. It just so happens that if we had the idea of scarcity thinking, oh my God, what, What I've got could be taken away from me. It would get us at a moment of where we would take stuff and leave stuff because we didn't want to take too much, or it might be taken from us biologically. It helped us to become the human beings we are and become the superior race that we've become or the species we've become. But let's put it into drive and bring in psychology. Scarcity thinking is that fear is a way of viewing the world that says, you know, what I've got could easily be taken away from me. I need to protect it.

Where does it come from?

It comes from our families, most families that we grow up in. Basically, they lock people into ways of working for another person because they're too scared what could happen out there? And yet at the same time that scarcity thinking, you know something, I'm just going to play it safe. You know, I may not be happy here, but it's a lot better than what could be happening out there. So they stay stuck, whether or not it's in business, whether or not it's in a corporate setting or whatever. Yet those same people, when they come to trading, don't realize that they're bringing something, scarcity thinking with them. And how does this end up showing up? My gosh, who hasn't been in a place where the trade's been up and down, up and down, up and down against you for you, and it finally hit that thing where it's gotten black and all of a sudden that urgency to, oh my God, it could be Taken away from me. I need to get out of this trade, trace that back to scarcity, thinking it could be taken away from me. I better take while the taking is good, not just fear of missing out. I ask you to look at that. Where does it come from? We grow up in families who take tests. We are taught to not miss much. We're taught to not reach too far, get the stable job, get the great career, get that job so that you have a paycheck and you're not living, you're not living, oh my God.

In this uncertainty.

Yet that's the deal with trading is you are living with uncertainty. It's your partner, it's what you do, it's the relationship. Yet we have a relationship with uncertainty based on scarcity. Thinking from our families and from our biological history.

What we need is a probability based mind that thinks very differently, that engages uncertainty. Not with the thought of oh my God, what could I lose, but with a mindset of this is really about performance. I don't control the outcome, I don't control winning or losing. What I control.

Is the mind that I bring into the moment of performance.

That's what I control. And what that does in trading, if you have a set of trading rules, a methodology that gives you a standard practice that you apply faithfully to the randomness of the markets, what it does, it creates an edge so that you're extracting more capital out of the markets, then you're giving back. That's trading. That's the mind that's needed to be able to trade. It's not about winning or losing, it's about performing. It's about taking that mind, recognizing you have no idea what's going to go on. However.

You can control the performance that you engage in. That's the whole point. You can control your execution by doing that. What you're doing is saying something. I no longer have the fear of missing out. I no longer have scarcity thinking. I'm not thinking about, oh my God, this could be taken from me. What you're doing is you're in performance, you have a set of rules and what you're doing is from an emotionally disciplined mind. You're staying in those rules, you're applying it, those rules over and over again, steadily, not saying, oh, this will. This, this fish got away. This, no, no, no. Faithfully reproducing those rules, reproducing that performances over time. You're moving out of scarcity, thinking that says, oh my God, he could be taken from you. Be safe to where you know, the truth is this is all probability. I have no idea what's going to happen. But I know that probability is that if I met, if I maintain my performance, the odds are with me. And that's enough for that kind of thinking. You are moving away from scarcity thinking into probability thinking where probability exists as potential and you allow the potential to arise and you allow that. Sometimes you win, which means you land on the good side, or sometimes you lose, you land on the wrong side of probability. It was all probability in the first place though. There was never certainty. There was only uncertainty and probability. And what you're doing as you move away from scarcity thinking and building a probability based mind, you leave that kind of fear based trading back, way back there in your evolutionary path and you're becoming designer of the mind that you bring into the moment of performance. And friends, that's what you can control. How do you do that? If you, if you a follower of my work, you know, it's a lot about emotional regulation, it's about mindfulness, it's about noticing that historical internal dialogue that's keeping you down, keeping you in scarcity thinking and then teaching you how to disrupt those old limbic patterns so that you can start building a new empowered mind based on probability. It can be done. The struggle of engaging uncertainty is always going to be there. You're always going to be vulnerable. But you don't have to be scared of that vulnerability anymore. What you can do is you can say, I know that I can bring a particular kind of mind into that vulnerability. Rather than going down fight flight, I can go down approach, I can perform in the moment. That's what I control and that's the edge that I've been seeking. Friends, it's radical. You're moving away from certainty based thinking.

Moving toward probability based thinking. You're moving away from scarcity thinking to probability thinking. This is what you're going to have to do if you're going to produce the success that you need. Look at your trading. Find out if that scarcity mentality ends up thinking your thoughts. Find out if it starts performing the actions. Or is there another mind that you can build that you would prefer, that is engaging the uncertainty and the vulnerability of probability. Friends, come and learn, come and learn.